Homebase set to close one in four of its shops

HOME Retail Group said yesterday it planned to shut a quarter of Home­base’s 323 branches, blaming excess retail space and the rise of a generation that had fallen out of love with DIY.

Chief executive John Walden said the rise of online and growing competition had left the DIY market “over-spaced” while an increasing number of younger “time-starved” people threatened to derail the sector. “As a nation, we are becoming less adept at DIY,” he said.

Around 80 stores will shut by 2018, part of a three-year turnaround plan that will see it introduce more Argos and Habitat concessions, sharpen prices and retrain staff.

The move could re­sult in 2,000 job losses, but Wald­en insisted it would “work hard” to find new jobs for its staff and intended create more jobs across the business overall.

Home Retail posted a 13 per cent rise in underlying profit to £30.9m in the six months to 30 August, with sales up three per cent to £2.7bn. Sales at Argos stores open over a year increased by 2.9 per cent and by 4.1 per cent at Homebase.

The company has been transforming its 747-store Argos business from a catalogue chain to a digitally-led busi­ness, targeting more sales from mobile phones and revamping its stores with iPads for browsing and faster check-outs.

Around 50 stores will be converted to its new digital format ahead of Christ­mas, the group said.

Home Retail is investing £300m in Argos as part of a five-year plan that is targeting a 15 per cent rise in revenue to £4.5bn by 2018.